MKTG 120 Flashcards
What is segmentation?
the process of dividing up the market into groups of buyers with distinct needs that may require separate marketing strategies.
What three characteristics does a market segment have?
- Homogenous (group members are similar, have common needs)
- Distinctive (significantly different from other segments)
- Reaction (group members react the same to marketing messages)
Companies that use market segmentation are more likely to:
Understand their customers better.
Design unique products/services that appeal to customer groups.
Retain customers/have higher customer satisfaction.
Use targeted marketing messaging.
Effectively allocate resources.
Increase competitiveness.
Increase profitability.
What is the segmentation criteria for measurable, accessible, substantial, differentiable, and actionable?
Measurable: how can we measure the size and purchasing power of the group?
Accessible: Can we reach and serve this group?
Substantial: Is the group large enough to serve?
Differentiable: Can we distinguish the group from others in the population?
Actionable: Do we have the resources to develop different marketing programs for each segment?
What are the four different approaches to market segmentation?
Mass Marketing
Segment Marketing
Niche Marketing
Individualized Marketing
What is central to how marketers run their business and market their products?
Segmentation, targeting, and product positioning are fundamental concepts that are central to how marketers run their business and market their purchases. These concepts are intertwined and work together to create and reinforce a product’s image to its consumers and to the market in general.
What is a market segmentation analysis?
Allows marketers to identify which segments could be a focus, where gaps in the market exist, and where future opportunities may lie. Having a clear position in the market allows more focused and consistent communication with customers in a meaningful way.
What three important facts of market segmentation, target markets, and product positioning based on?
Consumers have a range of different needs, and a single product cannot satisfy everyone.
- Companies have limited amounts of money, which needs to be spent efficiently on consumers who are most likely to purchase the product.
- Marketers need to have clear consumer insights on their target markets in terms of product needs, price expectations, purchase habits, and the communication tools most used.
What are the two main market segments?
The consumer market which consists of goods, services, and ideas that a person can purchase or support for his or her own personal use.
The business market which involves products that are purchased either to run a business or to be used as a component in another good or service.
What is a mass marketing strategy?
When a product with broad appeal is widely marketed to the entire market with no product or marketing differentiation at all.
What is segment marketing?
Involves the marketing of a wide range of different products and brands to specifically meet the needs of an org’s varied target markets.
What is Niche Marketing?
Where a company restricts its efforts to marketing a limited product line to a narrow but profitable single segment of the market that is of marginal interest to major competitors
What is Individualized Marketing?
Can also be called one-to-one marketing with “segments of one”. It involves customizing products to fit individual needs.
Can you think of a brand that has changed its strategy from mass marketing to segment marketing or individualized marketing?
Answers will vary. Changes are usually based on improvements in effectiveness of communication and promotion.
What is a target market?
The specific group or segment(s) of existing and potential consumers to which marketers direct their marketing efforts.
What 4 variables are marketing segmented in?
- Geographics (where does the target market live and work?)
- Demographics (what is the basic census type information on the target market as a whole? Includes identifying ranges for age, gender, family composition, income, occupation, education, ethnic background and home ownership)
- Psychographics (What are the prevailing attitudes, values, interests, habits, and approaches to life that this target market shares?)
- Behaviouristics (how does this target market use and interact with the new product? How often is it purchased and used? And whether consumers are brand loyal)
What is Brand Loyalty?
Refers to the favaourable attitudes that a consumer has over time toward a brand that results in varying levels of purchase commitment to the brand. Marketers strive toward having highly committed, brand-loyal consumers as this helps insulate their brands from competitive marketing practices and a rapidly changing marketing environment.
What are personas?
Character descriptions of a brand’s typical customers. Personas bring target market data alive by creating fictional character narratives, complete with images, in one-page descriptions or snapshots that capture personalities, values, attitudes, beliefs, demographics, and expected interactions of a typical user with a brand.
Well-defined personas usually include info on gender, age, interests, hobbies, education, goals, jobs, influencers, media usage, technology preferences, fears, concerns, drivers, and delights and interactions with the brand. They may capture a “day in the life” of a typical user.
What is the six step process for segmenting a market?
- Identify consumer/customer needs and common characteristics in the market: should be done from a customer perspective, looking at what drives the category and what future trends are evolving.
- Cluster common consumer/customer variables to create meaningful market segments: a marketer needs to stand back from the market and look for clusters of products and gaps in the market that point to common consumer interests, usage patterns, and prevailing attitudes.
- Estimate the size and feasibility of each segment: Based on external data analysis and/or use of segmentation analytics data, the size of the segment needs to be estimated.
- Identify the segment(s) to be targeted: Marketers should use the following criteria:
- Market size
- Expected growth
- Competitive position
- Compatibility with the org’s objectives and resources.
- Cost of reaching the segment.
- Take actions with marketing programs to reach the segment(s): once a target market has been selected, a marketing plan needs to be developed and implemented. Essential decisions about the marketing mix (product, price, place, and promotion) that are consistent with the needs and wants of the target market.
- Monitor and evaluate the success of these programs compared with objectives: Marketers often work with financial analysts to determine the sales forecasts, costs, and profits realized in comparison with the cost and sales projections.
What is product positioning?
refers to the impersonation of the branded product you want to establish in consumers’ minds relative to their needs and also in contrast to the competition.
What 3 factors do companies use to position their products?
Image. Products are often positioned as leaders, contenders, or rebels in the market, also taking on characteristics such as trusted, prestigious, or thrifty.
Product Attribute. Products with features that differentiate them from the competition are often positioned on this platform, bringing claims to the forefront.
Price. Products with brand parity and little product differentiation may position themselves on a price platform.
What is a positioning statement?
is a formalized statement that identifies the image a branded product represents in the market and what sets it apart from the competition. A positioning statement is generally included in a brand’s annual marketing plan and its relevant strategic documents. A product’s positioning drives activities throughout the organization.
What is repositioning?
is often implemented in stages over time with a refresh of a brand and the elements of its marketing mix.
What are positioning maps?
also known as perceptual maps, are visual representations of how products or product groups are positioned within a category to consumers/customers. Positioning maps can visually represent categories within a market or, more specifically, product and brand offerings within a category.
What 3 steps are key to positioning a product or brand effectively?
- Identify the important attributes for a product or brand class.
- Discover how target customers rate competing products or brands with respect to these attributes.
- Discover where the company’s product or brand is on these attributes in the minds of potential customers.
How is successful marketing undertaken?
by developing programs for customer engagement in order to meet their needs as well as wants and inspire customer loyalty.
What is customer value proposition?
conveys the unique combination of benefits received by targeted customers that will satisfy their needs. These benefits could include quality, price, convenience, delivery, and both before-sale and after-sale service.
What is a target market?
the specific group of existing and potential consumers to which marketers direct their efforts.
What are the 4 Ps in marketing?
Product - all attributes that make up a good, a service, or an idea to satisfy the customer need, including product design, features, colour, packaging, warranty, and service levels.
Price - what is exchanged for a product, including the expected regular retail or sales price.
Place - The way in which your product gets to the consumer, including the distribution channels, retail formats, and merchandising used to sell a product.
Promotion - the tools needed to communicate with consumers about a product, including advertising, public relations, sales promotion, direct response, event marketing, sponsorship, online approaches, and personal selling.
What is the marketing mix often refered to as?
the 4 ps
